Why insurance agents need to focus on retention in 2024 | Blog | ClientCircle
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Why insurance agents need to focus on retention in 2024

December 11, 2023 by ClientCircle

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2023 has been a challenging year for the insurance industry—inflation affecting replacement costs, ongoing regulatory changes in several U.S. markets, increasing natural catastrophes coast to coast, carriers exiting certain markets—the list is long.

As an agent, you’ve had to balance all of that while continuing to offer your clients the right policies and your expertise at competitive rates. Not an easy task.

Deloitte’s 2024 global insurance outlook suggests that to succeed in this new environment, insurers need to do more to support their clients and communities year-round, rather than only at the point of sale, renewal or during a claim.

There is one sure thing you can do that will have a positive impact on your bottom line as you look ahead into 2024: focus on retention.

Here’s why:

  • It costs less. Bringing in new customers is expensive. Retaining existing clients is more cost-effective because you’ve already spent the money to acquire them. Now you need to focus on keeping them happy. A lower churn rate will contribute to the overall stability of your agency.

  • You maintain a consistent revenue stream. Retaining the clients you already have ensures a steady and predictable revenue stream. Long-term customers are more likely to renew their policies and buy more policies later.

  • You have cross-selling opportunities at your fingertips. Building strong relationships with existing clients opens the door for you to offer additional insurance products or coverage options to meet their evolving needs.

  • Loyal clients bring you more business. If you focus on building relationships with existing clients, they will reward you by telling others how great you are. Referrals have a low acquisition cost if you do it right.

  • Customer lifetime value tends to go up. Long-term clients contribute more to the overall profitability of your agency. Over time, they generate more revenue through policy renewals, additional coverage purchases and referrals. Focusing on retention can increase the lifetime value of each customer.

  • Long-term clients are less likely to leave in uncertain times. Customers who have been with you for a while are often more forgiving during market fluctuations or changes. They may be more willing to adapt to policy adjustments, and their loyalty can provide a buffer against economic challenges outside of your control.

By having strong retention practices and processes in place, you can make sure your clients not only stick around but also bring you more business year after year. Plus, when your retention game is strong, you have more time to focus on new sales, too.

If you aren’t sure where to start with retention, here are five things to do first:

  • Collect feedback regularly. You may be surprised by what you hear when you ask your clients how they feel about your agency. Asking for feedback is critical to improving and maintaining retention. And the best way to do that is by surveying your customers regularly, ideally every six months, to make sure you don’t miss issues that could result in lost business.

  • Resolve issues quickly. Once client feedback starts rolling in, take action. Reach out to all neutral and negative survey responders right away, with a phone call, to solve the issue and improve your chances of retaining that client. And don’t forget about reaching out to your happy clients too—send them a thank you card or even a gift card to show your gratitude and solidify their loyalty.

  • Stay in touch throughout the year. Do you only reach out to your clients when it’s renewal time? To build long-term, meaningful relationships, make sure you communicate with customers throughout the year and don’t just talk insurance. Send helpful content like blogs and podcasts, schedule regular check-ins and don’t forget about important milestones like birthdays.

  • Make sure clients can contact you on their terms. Some people love talking on the phone, others avoid it at all costs. Meet your clients where they are. Make it easy for them to file a claim, request their insurance cards and ask you questions by offering texting, web chat, forms and other communication channels. With these tools, your customers can get help from someone at your agency during business hours and find the resources they need in the evenings and on weekends.

  • Show your clients you truly care. When other businesses are cluttering customers’ inboxes with emails, stand out with something more meaningful. Instead of a holiday or a birthday email, go old school and send a handwritten card in the mail. Your clients will notice this unexpected, personal touch. And when people love something, they talk about it.

Want to retain more clients?

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